China’s growing “luxury shame” among the middle class is leading to a significant drop in sales for global luxury brands, as reported by Frédéric Cho, a Swedish expert on China and vice chairman of the Sweden-China Trade Council. The economic slowdown in China has weakened consumer purchasing power, and even those who can afford luxury items are increasingly avoiding them.
This trend has had a noticeable impact on major luxury companies like LVMH and Kering, which have reported declines in profits and stock value. Both companies point to the Chinese market as a significant factor in their financial struggles.
Frédéric Cho attributes this shift to President Xi Jinping’s push for a more modest lifestyle, which aligns with traditional Chinese values of modesty—values that bear a strong resemblance to Swedish cultural norms. This cultural parallel could have implications for Swedish luxury brands and businesses operating in China, as they may need to adjust their strategies to align with these evolving consumer attitudes.
As China’s economy slowly recovers, the frugality of its vast middle class, estimated at 300-400 million people, presents both challenges and opportunities for Swedish companies seeking to maintain their foothold in this important market.
Source: ScandAsia
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